Do Bad Parents Lower Credit Scores?

By Quentin Fottrell

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In debt this holiday season? Blame it on the parents.

That’s the conclusion of a new survey by online broker TD Ameritrade. Parents can have a huge impact on whether their children are “dreamers,” those who are less likely to save, or “doers” – defined as those who have a 401(k), 403(b) or an IRA and are more likely to behave more like a saver than a spender, live within their means, have a budget and follow it, track household expenses, automatically deposit money from their monthly income into savings, and pay off credit card debt as soon as possible.

Some 74% of doers reported having parents who not only taught them the importance of saving for the future, but also led by example, compared to 64% of dreamers.

Parental guidance also influences whether one saves or spends. Around 57% of doers reported that their parents frequently talked to them about earning money and saving it, compared to 46% of dreamers — and 78% of doers consider themselves to be savers rather than spenders versus 33% of dreamers.

Small decisions relating to managing allowance can lead to big gains later in life, the survey says. “Emphasizing and exhibiting positive spending and saving habits early in life can lead to a more disciplined approach to money management in adulthood,” says Lule Demmissie, managing director of investment products and retirement at TD Ameritrade.

But not everyone is buying the results, and say parents are getting a bad rap. Seth Rabinowitz, partner at management consulting firm Silicon Associates, says there are other factors influencing spending habits this Black Friday and beyond. “Billion-dollar corporations have a stronger influence on consumerism than individual thinking,” he says.

Other consumer advocates say the blame for over-spending lies not with media, credit card companies, retailing marketing tricks, peers or parents but – sit down for this – consumers themselves. “Everyone is responsible for his or her own behavior, whether we are super savers or spendthrifts,” says Edgar Dworsky, founder of ConsumerWorld.org. He says the answer lies in the allure of the designer jeans: “Not in your genes.”

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Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.